Economics at your fingertips  

The Demand for Index‐Based Flood Insurance in a High‐Income Country

Martin Achtnicht () and Daniel Osberghaus ()

German Economic Review, 2019, vol. 20, issue 2, 217-242

Abstract: Increased flooding is expected to be one of the greatest threats caused by climate change. Flood insurance helps to cope with the risk of flooding, but take‐up rates are relatively low in many places. Mainly in developing countries, index‐based flood insurance – where the insurer's payout is based on pre‐agreed weather indices instead of actual loss – has been marketed recently. In this paper, we investigate whether the introduction of index‐based flood insurance with relatively low premiums is likely to attract new customers in a high‐income country, namely Germany. We use data from a discrete choice experiment combined with damage data for a major flood in 2013. We find index‐based flood insurance to attract similar customers as traditional damage‐based, while the latter is preferred on average. Our results suggest that not many new customers would enter the market, once index‐based flood insurance were available.

Date: 2019
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
Working Paper: The demand for index-based flood insurance in a high-income country (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1465-6485

Access Statistics for this article

German Economic Review is currently edited by Bernhard Felderer, Joseph F. Francois, Ivo Welch, Urs Schweizer and David E. Wildasin

More articles in German Economic Review from Verein für Socialpolitik Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2019-06-18
Handle: RePEc:bla:germec:v:20:y:2019:i:2:p:217-242